Terasen to reduce rates 12 per cent in Whistler

Change reflects lower cost of natural gas compared to propane

Terasen Gas Whistler recently applied for and received permission from the B.C. Utilities Commission to lower rates 12 per cent, effective June 1.

Carol Greaves, community relations manager for Terasen, said she expects rates to come down even more in the future once the conversion from propane to natural gas in complete.

Currently Whistler customers pay 2.4 times as much for propane service as Squamish and the Lower Mainland do for natural gas. Whether rates will be the same after the conversion is complete and cost recovery is complete has yet to be seen.

According to Greaves the higher interim rate "was designed to cover the conversion year, which is 2009, where we have some customers on propane and some on natural gas," she said. "We have had a decision on our (new) application which represents a 12 per cent decrease for the average residential customer in Whistler, and we're also anticipating more decreases in the near future that will be commodity-based."

Propane costs more per gigajoule than natural gas on the market. Greaves says Terasen doesn't make any profit from the sale of propane gas, just on the associated delivery charges.

To date roughly one quarter of all Terasen customers and future installations in Whistler have been converted to natural gas, which was made possible by a pipeline extension from Squamish to Whistler over the past two years. At press time the conversion project was on section 21 out of 84 sections, which involves burning off any propane stored in the pipeline and replacing pilot light fixtures in fireplaces, water heaters, stoves and other appliances to work with natural gas.

"The conversion is going wonderfully, we're really pleased with the progress," said Greaves. "We are on schedule. Our crews have been working hard and long hours, but the people have been great, and very accommodating of the change."

But while Whistler will be connected to Squamish and the Lower Mainland by a natural gas pipeline by this fall, the resort may continue to pay higher rates - at least in the short term.

Currently Terasen Gas Whistler is a separate company, which means the cost of the pipeline and the conversion will be applied solely to Whistler customers, instead of being spread out among all customers on the grid.

"Squamish is part of the Lower Mainland utility, which means costs are spread out over a greater number of customers, while Whistler stands alone as its own separate entity," Greaves explained. "Another reason rates are higher is because it was a propane system up until now and there were transportation costs. Bringing propane in by rail cars and tanker truck means our costs are higher than pushing gas through a pipe.

"As I said, we're anticipating more reductions in the near future when we don't have those additional costs."

According to the Terasen website, customers in Squamish and the Lower Mainland pay $109.56 for 10 gigajoules of natural gas. By way of comparison, Whistler customers pay $262.09 for the same amount of energy, natural gas and propane, or more than 2.4 times as much.

A gigajoule is a metric measure of energy use. One gigajoule (GJ) represents 16.1 cubic metres of natural gas, or the equivalent of 277.8 kilowatt hours of electricity.

The cost of the gas itself is only part of a monthly bill, as Terasen charges customers a base rate and delivery charges on top of every gigajoule of energy consumed. The cost per gigajoule can fluctuate with the market, but base and delivery rates generally remain constant.

In addition to lower costs in the future, Whistler customers can also look forward to lower emissions. Typically, Greaves said, the average customer's greenhouse gas emissions will be 15 per cent lower after the conversion.

While Terasen will recover most of the costs of the pipeline and the conversion from customers, the company also plans to sell its existing tank yards in Function Junction and at Nesters in the future. The only facility required for natural gas is an underground vault in Function Junction that regulates the flow of gas.